Inspire 2014 – The Boston Consulting Group: The Analytical Catalyst
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Inspire 2014 – The Boston Consulting Group: The Analytical Catalyst

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Over the past few years, BCG has been undergoing an analytical transformation. BCG has invested heavily in developing new teams and tools to take advantage of the rapidly changing Big Data landscape. ...

Over the past few years, BCG has been undergoing an analytical transformation. BCG has invested heavily in developing new teams and tools to take advantage of the rapidly changing Big Data landscape. Alteryx has been a critical player in this journey, turning hundreds of BCG consultants into data analysts. This increased analytical capacity has changed how BCG works – broadening insight and accelerating delivery. As a result, BCG is able to focus ever more on its clients and how it drives change based on insight. This enhanced analytical capacity has also opened new paths to profits, leading to the creation of compelling products for BCG's clients. In this session, Cornelius will share how BCG created the conditions for this analytical step change, drove distributed innovation, and developed new products to drive revenue and profit BCG and its clients.

Cornelius Kaestner, Principal, The Boston Consulting Group

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    Inspire 2014 – The Boston Consulting Group: The Analytical Catalyst Inspire 2014 – The Boston Consulting Group: The Analytical Catalyst Presentation Transcript

    • #inspire14 The Analytical Catalyst Cornelius Kaestner Principal The Boston Consulting Group
    • #inspire14#inspire14 Introductions Global management consulting firm and the world's leading advisor on business strategy Our ambition is to drive lasting competitive advantage for our clients 50 years of leading business thinking, e.g., • Applying experience curves to business • Growth share matrix (2x2) • Trading up / trading own 9,700 staff in 81 offices About About me Expert Principal at BCG focused on Big Data and Advanced Analytics Example engagements used to drive BCG's Big Data an Advanced analytical capabilities: • Enhancing promo effectiveness in retail • Applying predictive analytics to target airline, cruise line, and banking customers Educational background • Yale: BA App. Math (hons) & BA Econ (hons) • IMD: MBA (president's award)
    • #inspire14#inspire14 Many questions, few answers At the beginning of our unexpected journey • What should be our ambitions in analytics? – And when do we know if we've achieved them? • What is possible to do in house? Where should we partner? – When will analytics be a driver of competitive advantage for BCG? • What capability gaps do we face? – Tools? People and skills? Infrastructure? • How do we get started? • How do we get the rest of BCG excited about analytics?
    • #inspire14#inspire14 Since then: tremendous strides Little senior-level exposure to Big Data and Advanced Analytics efforts No view on the role of analytics at BCG Few, disjointed teams delivering targeted analytical solutions Little effort to enhance skills of broader consulting organization Limited understanding of how to use tools and infrastructure to drive value Where we started Where we are now Big Data and Advanced Analytics a top priority for BCG leadership Significant investment and development focus BCG Advanced Analytical teams aligned and coordinated across the company Alteryx and Tableau available to all consultants for regular case work Step change in tools and infrastructure capabilities within the firm
    • #inspire14#inspire14 4 components to catalyzing analytics What we've learned • Democratize the analytical opportunity • Introduce the art of the possible • Focus on value delivered • Keep building
    • #inspire14#inspire14 We made Alteryx available to everybody... Democratize the analytical opportunity (I) 1,291 0 500 1,000 1,500 3/1/13 11/1/139/1/137/1/13 3/1/141/1/145/1/13 Unique installations Functionality Ease of use Commercial flexibility Dedicated support
    • #inspire14#inspire14 ...and provided fundamentals to make adoption easier Democratize the analytical opportunity (II) • One-on-one training when first users adopted the tool • Tracking of internal experts to create a user community • Introductory training to share basics of the Alteryx tool • Detailed support from Alteryx to help crack more challenging use cases • Infrastructure available for larger scale data cases
    • #inspire14#inspire14 We embraced distributed innovation: no limits on use cases... Democratize the analytical opportunity (III) Simple problems Large data sets Large data sets Many data sources Complex data sets Predictive analytics Identify trends based on transaction data Analyze promotional events for effectiveness Predictive behavioral segmentations We made no effort to control the use of analytics, rather we trusted our colleagues to validate quality
    • #inspire14#inspire14 ...and invested in cool projects to ensure success Democratize the analytical opportunity (IV) • Building a model to calculate the effectiveness of promotions that could quickly be deployed across retailers • Designing a customer segmentation for a hotel chain that allowed valuable customers to be prioritized, independent of their stay history • Building a real estate planning model that enables retailers to manage their footprint much more effectively • Predicting server failures based on equipment event logs and launching preventive maintenance to avoid equipment failure • etc.
    • #inspire14#inspire14 • Raise awareness in important forums • Use practitioners to share the work • Articulate why this is not business as usual • Visualization > Algorithms Share new and exciting work with senior management Introduce the art of the possible (I) Bring out the inner "geek"
    • #inspire14#inspire14 Cool algorithms show what you've done... Introduce the art of the possible (II)
    • #inspire14#inspire14 ...but visualization shows why it matters Introduce the art of the possible (III) Ex: 2For offers beat price cuts... ... every time
    • #inspire14#inspire14 Numerous paths to value Focus on Value Delivered (I) • Savings for the company • Improvements to current products • Development of new products • New business models • etc. Need to find what resonates with your organization
    • #inspire14#inspire14 We built a new promo effectiveness offering for our clients Focus on Value Delivered (II) Pre-processing Client data Product Hierarchy Sales COGS Vendor funding Promo Calendar Opex rules Promo ID / SKU aggregation Seasonality Core economic calculations Cannibalization, Halo, Pull Forward Baseline P&L by promo ID by SKU Custom Standardized
    • #inspire14#inspire14 What it looks like in Alteryx Focus on Value Delivered (III)
    • #inspire14#inspire14 Standardized offer dramatically improves value proposition... Focus on Value Delivered (IV) Old approach New approach Custom promo model built for each client Development time to first economic model output: ~12 weeks Initial analysis focused on pilot categories Analyses executed by standard case teams; need to ensure skill set is available Only custom piece is data aggregation Economic model can be run in one day once data aggregated Model fully scalable: all categories can be analyzed at once Analyses executed by BCG Strategic Analytics team – skill set is already confirmed Most importantly: $300M+ client value, $10M+ client revenue and dozens of live client discussions
    • #inspire14#inspire14 Ambition is to continue to expand what we can deliver Keep building (I) Analytical complexity Scale of data Delivery approach
    • #inspire14#inspire14 Delivery will require continued capabilities investment Keep building (II) People & teams InfrastructureTools Aggressively pursue talent – especially those who can speak business and analytics Identify key gaps in people model – roles, incentives, career progression, etc. Accelerate deployment of existing tools within BCG Test and deploy new tools with complementary capabilities Expand use of cloud and Hadoop Expand availability and use of AWS Continuous effort to transform "advanced analytics" offerings to "business as usual"
    • #inspire14#inspire14 4 components to catalyzing analytics Recap: What we've learned • Democratize the analytical opportunity • Introduce the art of the possible • Focus on value delivered • Keep building
    • #inspire14 THANK YOU!